Student grants are to be in-introduced by the assembly cabinet in Wales in a move which has put pressure on the Westminster government to follow.

Welsh Education Minister Jane Davidson confirmed £41m has been ringfenced for less well-off families in a move which could anger English university applicants.

The minister told Assembly Members on Tuesday afternoon Wales's 250,000 students in higher and further education will be eligible for annual means-tested grants of up to £1,500 from September.

Grants at a glance

Up to £1,500 assistance

Reverses Westminster plan

£41m available

Around 43,000 to benefit

Means-tested on income

The assembly administration's decision to go it alone in the UK by reintroducing grants will put the Westminster government under more pressure to reject the favoured student loans arrangement.

On a visit to south Wales, Liberal Democrat leader Charles Kennedy said he hoped Tony Blair would follow the course set in Wales and Scotland.

His party, coalition cabinet colleagues in Cardiff, pre-empted details of Ms Davidson's announcement in Cardiff on Monday when Lib Dem assembly leader Mike German hinted recommendations of a report calling for the re-introduction would be implemented.

The education minister said on Tuesday: "It is my mission as education minister to encourage every single person to reach their individual learning potential.

"I will do everything I can to achieve this because we want Wales to be a learning country."

Multiple locations

Under the scheme, students at further education colleges will also be able to benefit.

And, unlike in Scotland, where tuition fees of up to £2,000 are paid for those studying there, the grants will apply to students from Wales wherever they study in the UK.

Up to 43,000 students are expected to benefit from the £41m grant fund being made available in the financial year ending April 2003.

It will be followed by another £50m the year after. Ms Davidson said 2.5% of that would be spent on administrative issues.

Jane Davidson says she is widening access

Payments are expected to average around £700, although some students will be entitled to £1500.

The existing system of student loans will still be available.

Tuition fees - which are the responsibility of the UK government - will also be retained.

"We have a much larger number of people from poorer communities continuing into higher education," said Ms Davidson

"Our ambition is to widen access to education for everyone."

Fees campaign

National Union of Students president Owain James said: "This is a great victory for Welsh students.

"Maintenance grants are crucial to keep students in education.

"Much more must be done if the government is serious about widening participation and allowing all students to compete on a level playing field.

"The government has a golden opportunity to get funding right for all students.

"Scotland, Wales and Northern Ireland have all made positive changes, the
question remains when is Whitehall going to listen?"

Next week thousands of students from across the UK are expected to march through London on a campaign rally demanding the abolition of tuition fees and the introduction of grants.

The Welsh move to introduce means-tested grants has been instantly welcomed by the National Union of Students as "a great victory".

Students protest against finance arrangements in Cardiff

NUT spokesman Owain James said the decision would be used as a lever for a UK-wide parallel grant system - abolished by the Westminster government in 1997.

The view was echoed by Professor Theresa Rees, chair of the group which wrote the original hardship report recommending the re-introduction of grants.

Professor Rees said her report had come up with three sets of recommendations - for the assembly, the government and other groups.

It recommended the abolition of tuition fees, something which is beyond the assembly's remit under current devolved powers, the re-introduction of the maintenance grant for higher education, and a similar grant for further education.

"The Westminster government needs to grasp the thorn and do something about it ," she said.

Britain review

Conservative education spokesman Jonathan Morgan AM said Labour had performed a u-turn on its 1997 election-winning policy.

The party should apologise for abolishing grants and introducing tuition fees in the first place, he told the chamber.

And Welsh Tory leader Nick Bourne said tuition fees should also be scrapped.

A spokesperson for the Department for Education and Skills said: "The Welsh have a
devolved assembly and are able to make certain changes.

"The future of the overall student support system in England and Wales is being considered by the student funding review which will report soon."